CA AB35

Excludes from gross income certain student loans discharged between December 31, 2020, and January 1, 2026, for taxable years beginning on or after January 1, 2021, and before January 1, 2026.

Applies the special rule for student loan discharges from the American Rescue Plan Act of 2021 (Public Law 117-2) to California state tax law.

Modifies the application of federal tax law regarding discharges on account of death or disability to apply to loans discharged after December 31, 2018, rather than the federal limitation of after December 31, 2017, and before January 1, 2026.

States legislative intent to comply with tax expenditure reporting requirements regarding goals, purposes, objectives, performance indicators, and data collection.

Declares that the student loan discharge exclusion serves the public purpose of conforming with federal tax law and does not constitute a gift of public funds under the California Constitution.